TAIKANG LIFE PLANS 340M YUAN ISSUE

Chinese mid-size assurer Taikang Life is planning a 340m yuan subordinated debt issue in order to boost its solvency ratio. The company has obtained the approval of the China insurance Regulatory Commission (CIRC) for the issue. A 10-year fixed-rate offering will raise 160m yuan, while a 15-year fixed-rate offering will raise 180m yuan. Taikang was launched in August 1996 and originally had capital of 600m yuan. However, this is said to be insufficient to cope with the company’s rapid growth. A solvency ratio of 254% in 2002 fell to 158% in 2004, despite a subordinate bond issue of 1.3bn yuan in bonds in 2003, and looks set to fall to just 84% next year unless more capital is raised. Beijing-based Taikang Life is one of the fastest-growing assurers in China, now in the second tier behind China Life and Ping An, the listed leaders in the Chinese assurance market. Taikang could list in about three years, when profits reach around 1bn yuan, according to CEO Chen Dongsheng.